APRIL 2018 FORBES ASIA | 49JAMEL TOPPIN FOR FORBES
former Browning-Ferris execs told him the company had ignored
rural areas. Jacobs hired them and went on an acquisition tear, con-
solidating hundreds of mom-and-pop collectors with overlapping
routes in areas like southern Kentucky and Michigan. He took Unit-
ed Waste public in 1992 and sold it in 1997 (to what later became
Wa s t e Management) for $2.2 billion, netting $120 million on his
original $ 3 million investment.
As that sale closed, Jacobs was working with investment bank-
ers on his next roll-up play: heavy equipment rentals. He liked it, he
says, because it was not only a fragmented market but also a grow-
ing one, as companies switched from owning to renting equipment
like bulldozers, generators and scissor lits. He invested $ 3 5 million
and in December 1997 took United Rentals public. By March he
had raised a total of $285 million in two oferings, retaining a 42%
stake. Jacobs traveled the country tearing out Yellow Pages listings
to ind mom-and-pop rental shops to buy. Ater hundreds of deals,
URI passed Hertz to become the world’s largest equipment renter.
But in 2004 the Securities & Exchange Commission began inves-
tigating URI’s accounting practices. Two former top execs eventually
pleaded guilty to fudging the books from 2000 to 2002 to meet earn-
ings forecasts. Jacobs was never implicated in wrongdoing, and in
July 2007 private equity irm Cerberus agreed to buy URI for $4 bil-
lion, or $ 3 4.50 a share, a 25% premium, plus the assumption of $2.6
billion in debt. Jacobs, then URI’s chairman, resigned and went of
to run his private investment company. Five months later, as credit
markets tightened, Cerberus lost its inancing and backed out of the
deal. URI’s stock eventually fell below $5; Jacobs himself wanted totake URI private but couldn’t get the money. Yet since his departure
from URI, Jacobs’ vision for that roll-up has been vindicated: he
stock now trades at $180, for a market cap of $15 billion.
It took a bit longer for Jacobs to ind his next target industry. In
2011 he began assembling a team of logistics insiders to capitalize on
what he frames as a highly fragmented but growing $ 3 trillion global
market for moving goods. His thesis: Companies don’t want to own
their logistics headaches and will happily turn the worry over to
an outit like XPO that ofers everything from intermodal and full-
truckload shipping to partial-load shipping, distribution warehouses
and deliveries of heavy goods to a consumer’s door.
Jacobs purposely started out in a capital-light niche of the mar-
ket. Freight brokers like Express-1 don’t own trucks; they’re middle-
men connecting shippers with truckers. But that was only a beach-
head for staging acquisitions. Ater lining up more inancing, Jacobs
snapped up 3 PD, which gave him a presence in home deliveries and
installations; intermodal shipping outit Pacer; and contract logistics
leader New Breed, which has such blue-chip customers as Disney,
Boeing and Verizon. A big push now is cross-selling between units.
Jacobs says 94 of XPO’s 100 top customers buy multiple lines of ser-
vice from it, up from 86 a year ago.
And if the economy turns? Say this for Jacobs: He gets the value
of improvisation. “In jazz, if you hit a wrong note, there’s no such
thing as a wrong note. hat’s the note, that’s the reality. You radi-
cally accept that, and you build on it,” he rifs. “Music is really busi-
ness.... You have to be using all of your senses at the same time, and
you have to be dancing with the circumstances and evolving.”Moving man: Bradley Jacobs has gone from oil brokerage to trash hauling to heavy equipment rentals to logistics.
“If you look at all my companies,’’ he says, “the theme is moving stuf from one place to another eiciently.”F